Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on BioMerieux. We currently have 11 research reports from 1 professional analysts.
Following the Q4 17 trading update, bioMerieux released its FY17 results which were largely in line with our estimates. On sales growth of 8.8% (+10.2% at CER; c.2x market growth), the adjusted operating profit increased by 12.4% (€335m; c.1% above AV’s estimate), benefiting from strong volume growth and an improvement in the product mix. While financial charges remained stable yoy, lower than expected tax expenses (US tax reforms resulted in a €30m non-recurring/non-cash benefit) underpinned the EPS to €2.02 per share (+32.8%). For FY17, management has proposed a dividend of €0.34 per share (€40.2m vs. €39.5m in the previous year). However, the guidance for FY18 is slightly on a weaker side. While sales are likely to grow at 8-9% (at CER), the adjusted operating profit is anticipated to be in the €325-345m range. Adverse currency impacts (c.€120m on sales; c.€40m at EBIT level) and higher R&D expenses (c.14% of sales vs. FY17: 13.3%) should pressurise margins. Management has also guided for capex of 9-10% of sales (towards capacity expansion and automation) and an effective tax rate of 24-26% (following implementation of the US tax reforms). On the governance front, Guillaume Bouhours was appointed as the Corporate VP and CFO of bioMerieux in March 2018, following the retirement of Claire Giraut. Bouhours joins from Wabtec Corporation (Group President – Access & Mobility; 2016-18) and was previously associated with Faiveley Transport (CFO; 2010-16).
bioMerieux released its Q4 17 trading results wherein sales were in line with our estimates. Revenue at CER came in at +8.9% on the back of double-digit growth in the clinical applications segment (+10.4%; accounts for c.81% of Q4 17 sales). Within the segment, the growth momentum accelerated in the molecular biology business (+40.4%; accounts for c.22% of Q4 17 sales) as an earlier start to the flu season boosted growth for FilmArray (+c.50%; particularly reagents for the respiratory panel). Sales in the microbiology business came in at +3.9% (accounts for c.40% of Q4 17 sales) as the robust demand for the BacT/ALERT blood culture line was slightly offset by modest growth in the VITEK business line. However, the immunoassays business slumped to -0.3% (accounts for c.19% of Q4 17 sales) impacted by increased competition in the US PCT space. On the other hand, the industrial applications segment surged 8.4% (accounts for c.18% of Q4 17 sales) driven by an acceleration in pharmaceutical industry sales. At the group level, reagents/services gained 11.5% (accounts for c.89% of Q4 17 sales) while instruments sales plummeted 12.1% (accounts for c.11% of Q4 17 sales). Geographically, the momentum stepped up in the Americas region (+16.6%; accounts for c.43% of Q4 17 sales) benefitting from a turnaround in the Brazilian business and strong demand for FilmArray in the US. Performance in the EMEA region was satisfactory (+4%; accounts for c.39% of Q4 17 sales) as Western Europe reported a mixed set of results (France, Spain and Germany were up while the UK and the Benelux region were slow). Sales in the Asia-Pacific region decelerated to +4.9% (accounts for c.18% of Q4 17 sales) affected by lower instrument sales in China. With the € strengthening against a number of currencies during Q4 17, bioMerieux recorded currency headwinds of €29m, lowering the total revenue to €613.8m (+3.8% yoy). For FY17, revenue at CER increased by 10.2% (vs AV’s estimate: +10.1%), slightly ahead of the target range of 9-10%. The growth was evenly balanced across reagents/services (+10%) and instruments (+11.8%). After including negative currency impact of 1.4%, the total revenue increased by 8.8% for FY17. Management has reiterated its adjusted operating profit guidance of €330-345m (FY17 results due on 28 February 2018). Note that, the change in the US tax rate will result in a non-recurring/non-cash benefit of c.€30m in FY17 (relates to deferred tax assets/liabilities with no impact on tax disbursements). For FY18, the effective tax rate would be in the 24-26% range (vs 30.8% in FY16). On the governance front, Alexandre Merieux was appointed as the Chairman and CEO of bioMerieux (effective 15 December 2017), succeeding Jean-Luc Belingard, who held the position since 2010. As a reminder, Alexandre is the son of Alain Merieux, the founder of bioMerieux and has been the Deputy CEO of the company for the last three years.
bioMerieux released its Q3 17 trading results which were ahead of our estimates (revenue at CER: +9.6% vs AV’s estimate: +7.7%) on the back of strong growth momentum in the traditional microbiology business lines. While the clinical microbiology segment (+9.7% vs AV’s estimate: +4%; accounts for c.44% of Q3 17 sales) benefited from robust performance in the VITEK product line, growth in the industrial microbiology segment (+10.6% vs AV’s estimate: +4%; accounts for c.19% of Q3 17 sales) was boosted by an acceleration in pharmaceutical industry sales. Though the molecular biology segment recorded another good quarter led by FilmArray (+29.4% vs AV’s estimate: +35%; accounts for c.17% of Q3 17 sales), there was a noticeable deceleration when compared to H1 17. Moreover, sales in the immunoassays segment were unsatisfactory (+0.9% vs AV’s estimate: +4%; accounts for c.20% of Q3 17 sales) as the good performance in the Asia-Pacific region was offset by a slowdown in instrument and reagent sales in North America. At the group level, reagents were up 8.6% (accounts for c.90% of Q3 17 sales) while instruments surged 19% (accounts for c.10% of Q3 17 sales). Geographically, the Asia-Pacific region was the key growth driver (+17.8%; accounts for c.19% of Q3 17 sales) led by robust demand in China and South-East Asia (+40% yoy). Performance in the EMEA region was satisfactory (+3.4%; accounts for c.38% of Q3 17 sales) driven by sustained demand for industrial (particularly in the UK and Germany) as well as clinical application products (in France, Italy and Switzerland). However, with difficult business conditions following cuts in some healthcare reimbursements, momentum in the Americas region lost pace (+12.3% vs H1 17: +18.7%; accounts for c.43% of Q3 17 sales). With the € strengthening against a number of currencies, notably the $, the currency benefits recorded in H1 17 (€21m) were entirely wiped out during the quarter. After taking into consideration forex headwinds (3.9%), reported revenue increased by +5.7%. For FY17, management has reiterated its revenue growth target of 9-10% (at CER). Note that in Q3 17, bioMerieux received the close-out letter from the US FDA relating to its Durham/North Carolina facility (warning letter was issued in 2012). As a reminder, the facility became fully operational in 2016.
bioMerieux released its Q2 17 results, wherein revenue was broadly in line with our estimates but profitability outperformed. Revenue at CER increased by 9.1% (vs AV’s estimate: +9.2%) led by strong growth momentum in the clinical applications segment (+11.2% vs AV’s estimate: +10.6%; accounts for c.82% of Q2 17 sales). Within the segment, the molecular biology business was once again the primary growth contributor (+40.3% vs AV’s estimate: +40%; accounts for c.18% of Q2 17 sales) driven by the fast-paced development of FilmArray in North America. Revenue in the microbiology business line came in at +5.5% (vs AV’s estimate: +4.5%; accounts for c.42% of Q2 17 sales) on the back of sustained demand in the VITEK franchise (+c.10% in H1 17) and the blood culture product line (+c.6% in Q2 17). The immunoassays business was up 4% (vs AV’s estimate: +5%; accounts for c.21% of Q2 17 sales) with VIDAS being the key growth driver (+5%; PCT up double-digit in the US). After a strong start (Q1 17: +14.5%), momentum in the industrial applications segment normalised to +6.4% (vs AV’s estimate: +5%; accounts for c.18% of Q2 17 sales) with continued demand for traditional solutions (VIDAS/GENE-UP for food industry) and alternative methods (CHEMUNEX cytometry line for pharma industry). All in all, the growth was balanced across reagents/services (+9.1%; accounts for c.90% of Q2 17 sales) and instruments (+9.2%; accounts for c.10% of Q2 17 sales). Geographically, the best performer was the Americas region (+17%; accounts for c.44% of Q2 17 sales) boosted by the success of FilmArray and robust growth in microbiology. Asia-Pacific was up 7.1% (accounts for c.18% of Q2 17 sales) led by strong demand in India (+c.20%) and China (+6%; bioMerieux’s third largest market). Growth in the EMEA region came in at +2.8% (accounts for c.38% of Q2 17 sales) as the good performances in the UK, Switzerland and the Scandinavian countries was partially offset by the slowdown in Spain and some Central European countries. For H1 17, reported revenue increased by 13.3% after taking into consideration currency tailwinds of 2% (+€21m). The underlying operating margin jumped to 15.2% (+30bp yoy) benefiting from improved product mix and a favourable currency impact. Note that, the board has approved a 3:1 stock split (payment date: 22 September 2017). Given the strong H1 17 performance and lower than expected currency headwind, management has upgraded its FY17 guidance. The company targets organic revenue growth of 9-10% (+100bp vs earlier guidance) and adjusted operating profit of €330-345m (+€30m vs earlier guidance).
bioMerieux released Q1 FY17 trading results ahead of our estimates as well as market consensus. The revenue at CER increased by 13.7% (vs AV’s estimate: +9.5%), driven by strong growth momentum in the clinical applications segment (+14.7% vs AV’s estimate: +9.7%; accounts for c.81% of Q1 17 sales). Within the segment, the key growth contributor was the molecular biology business (+43.4% vs AV’s estimate: +30%; accounts for c.21% of Q1 17 sales), led by a stellar performance in the FilmArray product line (+60% yoy). The growth momentum accelerated in the microbiology business (+8.1% vs AV’s estimate: +4.5%; Q4 16: +1%; accounts for c.40% of Q1 17 sales), on the back of higher demand for new instruments (particularly the VITEK product line). The immunoassays business remained stable (+5.9% vs AV’s estimate: +5%; accounts for c.20% of Q1 17 sales) with VIDAS being the key growth contributor (double-digit growth for VIDAS BRAHMS PCT test in the US). The industrial applications segment clocked a 14.5% revenue increase (vs AV’s estimate: +5%; accounts for c.18% of Q1 17 sales), benefiting from robust growth in the agri-food and pharmaceutical businesses. All in all, sales for reagents and services increased by 13.5% (accounts for c.91% of Q1 17 sales), whereas instruments surged by 26% (accounts for c.9% of Q1 17 sales). Geographically, the biggest beneficiary was the Americas region (+20.6% vs Q4 16: +17.5%; c.47% of Q1 17 sales), aided by a stronger and longer-lasting flu season in North America (+21.9% yoy). The momentum turned positive in the Asia-Pacific region (+17.5% vs Q4 16: -5%; accounts for c.15% of Q1 17 sales), primarily due to double-digit growth in instrument sales in China. Growth in the EMEA region remained stable (+5.4% in Q1 17 and Q4 16; accounts for c.38% of Q1 17 sales), driven by sustained growth in France, Germany and the UK. The total reported revenue was up 16.3%, reflecting a +2.6% currency effect. In April 2017, FilmArray’s respiratory panel 2 (RP2) got a CE Mark and should be commercially available in all eligible countries from June 2017. In addition, a 510(k) application has been submitted to the US FDA for the same panel. For FY17, management expects the organic revenue to increase by 8-9% and the adjusted operating income to come in at €300-315m.
bioMerieux released Q3 FY16 trading results in line with street estimates. Total revenue increased by 9.1% at CER (vs Q3 15: +8.8%), fuelled by strong growth in the clinical applications segment (+9.8% vs Q3 15: +7.9%; c.81% of Q3 16 sales). Within the segment, the growth in the molecular biology business accelerated to +48.0% (vs Q3 15: +31.7%; c.16% of Q3 16 sales), led by strong demand for instruments in the FilmArray business line (+78.0% yoy). The strong performance continued in the microbiology business (+4.2% vs Q3 15: +3.0%; c.44% of Q3 16 sales), largely driven by the sales of BacT/ALERT blood culture and the VIRTUO product line (+12.0% yoy). However, growth in the immunoassays business slowed down (+4.4% vs Q3 15: +9.0%; c.21% of Q3 16 sales), due to increased competition in the routine testing franchise. The industrial applications segment witnessed an 8.7% increase in sales (vs Q3 15: +2.4%; c.19% of Q3 16 sales), driven by the sustained demand for VIDAS and VITEK product lines by the food sector and an increase in demand for flow cytometry solutions by the pharmaceutical sector. Geographically, the biggest beneficiary was the APAC region, wherein, sales were up 11.6% (vs Q3 15: +0.6%; c.18% of Q3 16 sales), on the back of robust growth in China, India and South Korea (all up by c.15%). Revenue growth also accelerated in the LatAm region (+14.2% vs Q3 15: +10.3%; c.7% of Q3 16 sales) as the demand in Brazil and Argentina gathered pace during the period. The positive momentum continued in North America (+18.4% vs Q3 15: +18.4%; c.35% of Q3 16 sales), benefiting from the strong uptake in installations of FilmArray systems across laboratories. However, growth in the EMEA region slumped to +1.0% (vs Q3 15: +4.9%; c.40% of Q3 16 sales), primarily due to a slowdown in the Middle East, France and in certain Southern European countries. The total reported revenue grew by 6.8% (vs Q3 15: +16.1%), reflecting a -1.3% currency effect and a -0.9% scope effect. Given the strong momentum registered in 9M, management expects the lfl revenue growth for FY16 to be above the higher end of the previous guidance of 6-8% range.
Q1 sales were up 11.5% lfl (+9.1% reported), including North America (37.4% of group’s sales) growing by 24% lfl (+26.4% reported).
The contributive operating income rose 14.6% (FY15 sales +15.7%). Net income of consolidated companies decreased by 18.5%. Operating CF increased by 4%.
Q4 sales increased by 9.4% (4% lfl). FY15 sales growth was 15.7% (7.1% lfl). In the US (now accounting for 31% of bioMérieux sales), Q4 sales were up 14.6% lfl .
Q3 sales were up 16.1% (+8.8% lfl). For the first nine months, sales growth increased by 18.3% (+8.3% lfl). Q3 sales were up 18.4% lfl in the US, +10.3% in Latin America and +4.9% in Europe.
Research Tree provides access to ongoing research coverage, media content and regulatory news on BioMerieux. We currently have 11 research reports from 1 professional analysts.
A trading update for the year ending 31 March 2018 indicates revenues to be c.£1m lower than expected at £13.6m, resulting in an adjusted pre-tax loss of c.£0.7m versus our pre-tax profit forecast of £0.5m. A strategic review of the business by the new CEO has led to the decision to withdraw from its German Allergy business and manufacturing facility in Pune India, which had a combined LBITDA of c.£0.8m in FY 2018. Together with a legal simplification of its UK businesses, annualised losses of £1.0m should be eliminated. Assuming the closure of these two sites, the group should be profitable (adjusted EBITDA and pre-tax profit of £1.5m and £0.5m in FY 2018), albeit on a reduced revenue base. Year-end net debt is expected to have been c.£0.7m and with an available overdraft facility of £2m, this is expected to be sufficient meet the ongoing cash needs of the remaining businesses. Forecasts under review.
Companies: Omega Diagnostics Group
The interim results showed an adjusted net loss of £3.75m and period-end cash of £8.3m, in line with our FY 2018 expectations. Continued growth in Affimer evaluations (+50%) and interest from pharma/biotech/diagnostics demonstrates the increasing awareness of its potential capabilities that, we expect, will result in license deals for non-therapeutics applications in the balance of 2018. The decision to take a bispecific PD-L1/LAG-Affimer into the clinic as its lead asset, generating Phase I clinical data in 2020/21, should deliver a considerably more valuable asset for partnering, given licensing precedence in this area (Merck paid €115m for access to a bispecific PD-L1/LAG-3 antibody). The scientific progress made during the period belies the share price performance. No change to TP.
Companies: Avacta Group
Two product acquisitions fit with the company’s buy-and-build strategy and are forecast to be 2-6% EPS-enhancing in 2018-2020. Alliance paid £18.7m ($25m) for the two products, representing c.2.7x EV/Sales, up to $4.5m of which is deferred until 2019/2020. The larger acquisition of Vamousse is the company’s first acquisition with significant US sales, signalling perhaps the direction of its future M&A strategy. Net debt is expected to rise to c.£75m at year-end 2017 (2.6x leverage), We increase our target price to 70p, implying 2018 P/E and EV/EBITDA of 14.7x and 11.9x, respectively.
Companies: Alliance Pharma
2018 is the year of the Great Exhibition of the North. This summer, Newcastle and Gateshead will play host to a government-sponsored, 80-day marathon of events. Billed as the largest event in England this year, the Great Exhibition will showcase the best of the North East’s art, culture, design and innovation and we expect it to highlight the region’s ongoing success in high-end engineering, technology and life sciences. It may also reflect on the success of the North East’s plcs, the most striking example of which is Sage’s transition from 1980’s start-up to £9bn FTSE100 stalwart. We remain on the look out for the next Sage and expect the region to continue to produce attractive IPO candidates following Ramsdens’ success last year. Overall 2017 was a positive year for the region’s listed companies, one highlight of which was the takeover of Quantum Pharma, an N+1 Singer client, by Clinigen for £150m. We are confident that 2018 will be another successful year. Our top regional picks this year are Hargreaves Services, Zytronic and Applied Graphene Materials.
Companies: AGM BWY GRI GRG HSP IDH KMK NTG RFX UTW VNET ZYT
Deltex has announced that its French distributor, Gamida, has been awarded a new tender to supply hospitals in Paris with the Deltex CardioQ-ODM+ equipment.
Companies: Deltex Medical Group
Pharmaceutical Services is a vast and varied landscape, reflecting the complexities in the discovery, development, manufacturing and monitoring of drugs and devices, all within a stringent regulatory environment. The overall growth prospects are highly favourable: drug development activity globally is on the up, led by smaller companies, which is driving demand for outsourced services. In this report we provide a breakdown of the sector into its main activity segments, and identify biologics, increasing service specialisation and consolidation as important value drivers. Finally, we present 15 companies (9 of which are publicly listed) that, in our view, are well placed to benefit from the sector’s secular growth trends.
Companies: ABZA BQE CSRT OXB INS UDG CLIN ABZA HZD ERGO
Applied Graphene Materials (AGM LN) Collaboration on W Motors Fenyr SuperSport car | ATTRAQT Group (ATQT LN) Opportunities intact, focus on execution | Domino’s Pizza Group (DOM LN) Good set of finals and strong start to FY18 | Frontier Smart Technologies Group (FST LN) Strong results with more to come | Spirent Communications (SPT LN) Good progress in FY’17 | Summit Therapeutics (SUMM LN) Enrolment opened for an additional group in PhaseOut DMD trial
Companies: AGM ATQT DOM FST SPT SUMM
Bioventix reported a strong set of interim results, with EPS rising 40% boosted by the unexpected inclusion of £0.8m of back-dated royalties from one of its customers. Underlying revenue growth was still robust, rising 13% (c.18% at constant exchange rates (CER)), driven by both Vitamin D antibody sales/royalties and other antibodies which offset a c.£0.4m reduction in revenues from one customer following the termination of the licence. This, in turn, led to a 39% increase in pre-tax profits and a 40% increase in adjusted EPS. An interim dividend of 25p was declared (+25%) with net cash at period end of £5.6m (excludes £0.8m of back-dated royalties). We have increased FY 2018 EPS by 15% to take account of the back-dated royalty and 2019 by 2%, which reflects the underlying performance. Consequently, we raise our target price to 2650p, at which level the stock trades on a 26.5x FY 2019 P/E and an EV/EBITDA of 20.1x.
Boohoo.com (BOO LN) Results preview – target price raised to 50p – re-iterate Buy | easyHotel (EZH LN) H1 trading ahead of expectations | Grainger (GRI LN) Disposal of last major tranche of German assets | Halfords Group (HFD LN) Solid Q4 ends tricky year with good momentum and initiatives for FY17 | Midatech Pharma (MTPH LN) FY results in line; Phase II insulin data remains expected in Q2 | Walker Greenbank (WGB LN) Near term disruption covered and strategic growth plans continue
Companies: BOO EZH GRI HFD MTPH WGB
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week. Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.
Companies: OPM ACT ATQT EYE ERGO FFX GAL KBT OPTI REDX RDT SAR SPRP XLM
A strong set of interims this morning, with revenues +14% and a move back into sustainable profits confirmed. Ahead of the acquisition of Elemental in August, net cash increased to £1.2m. We make no changes to our forecasts at this stage after upgrading materially for the Elemental deal, which we continue to view as transformational for the group. We see plenty of mileage in the story and reiterate our Buy recommendation.
Companies: Surgical Innovations Group
C4X Discovery (LSE: C4XD), an innovative company in the discovery, rational design and development of small-molecule drugs, has reported its results for the 12 months to July 31, 2016. During the period the company further enhanced its drug discovery engine through acquisitions and continued to advance and broaden its portfolio of proprietary drug discovery programmes. The acquisitions (Adorial’s innovative target discovery platform technology, Taxonomy3, and Molplex’s pioneering chemoinformatics and artificial intelligence software platform), combine powerfully with C4XD’s drug discovery and rational molecule optimisation technology platform, Conformetrix, to create a state-of-the-art drug discovery engine. We believe this has the potential to become one of the industry’s most productive drug discovery engines generating better drug candidates against smarter new targets, substantially more rapidly and cost-effectively than existing industry approaches. With the strategic shift away from fee-for-service deals towards building the proprietary drug portfolio and signing higher-value partnership and out-licensing deals, we believe now is a great time to buy into C4XD.
Companies: C4X Discovery
Alliance Pharma is a profitable, cash-generative, dividend-paying specialty pharmaceutical company that has developed through a buy-and-build strategy. Through the transformative acquisition of Sinclair Pharma’s non-aesthetics product portfolio in late 2015, the company has doubled in size, growing EPS by 11% in 2016. The enlarged business creates further opportunities to leverage its distribution capabilities, best illustrated by the in-licensing of the European rights for Diclectin, which is set to become the company's largest product and drive sustainable growth over the next five years. We forecast CAGR 2016-2020 sales, EBITDA and EPS of 8%, 10% and 11%, respectively. We initiate with a Buy recommendation and price target of 65p, based on a 2018 EV/EBITDA of 11.1x and supported by DCF.
Companies: Alliance Pharma
Interim results show good progress towards the company’s shorter term objective of moving through the operating cash breakeven point. Revenues grew 7% to £2.88m but with margin improvement initiatives and a better sales mix, gross profits increased 26% to £2.18m and, combined with overhead reductions, the operating loss was reduced by 37% to £1.08m. Importantly, cash burn was reduced by 64% from £1.80m in H1 last year to £0.64m.
Companies: Deltex Medical Group
The growing Contract Research Organisation has published H1 June 2017 results. Despite the deferral of a late phase project into Q1 2018 VENN still managed to deliver 1% revenue growth to €9.15m and EBITDA growth of €0.414m. Growth was further held back by an underperformance of elements of the early-phase part of the business. However, infrastructure and systems are now largely complete and Venn is confident of its ability to execute new business opportunities leveraging its full drug development lifecycle range of services and to reduce the concentration risk of business weighting amongst its top 10 clients.
Companies: Venn Life Sciences